The Context for Real Estate In Canada: 15 Dimensions of Change David - PDF document

The Context for Real Estate In Canada: 15 Dimensions of Change David Baxter – Urban Futures Background report and presentation at realestateforums.com/torontoref/en/program.php and urbanfutures.com 1 urbanfutures.com urbanfutures.com Changing Currents: Demographic: Changing Generational Reality Social: Changing Life Cycles and Life Styles Economic: Changing Economic Structure 2 urbanfutures.com urbanfutures.com 1

Canada’s population will increase by 3.7 million (11%) more people over the next decade*. This population growth will result in an increase in occupancy demand for 1.9 million (13%) net additional dwellings as primary residences * Includes non ‐ permanent residents 3 urbanfutures.com urbanfutures.com Two ‐ thirds of the growth in the five largest metro areas: These five sum to 2.5 million increase, out of national total of 3.7 million. 4 urbanfutures.com urbanfutures.com 2

‐ Occupancy demand for primary residences ‐ Replacement demand ‐ Turnover, renovation, maintenance demand ‐ Demand for Non ‐ primary residences, such as: Second homes Tourist Accommodation BnBs, Air ‐ bnbs, Flipkey, VRBO, etc., (occupants as investors) 5 urbanfutures.com urbanfutures.com A Market: Additional demand means additional supply: without the additional demand, would not have produced the additional units. D1 D2 S1 S2 Price P1t LRS P2 P1 Q1 Q2 Q3 Quantity ‐ units 6 urbanfutures.com urbanfutures.com 3

Changing Currents: Demographic: Changing Generational Reality 7 urbanfutures.com urbanfutures.com 8 urbanfutures.com urbanfutures.com 4

A 20 year age group A 20 year age group (if alive) 1986..05 1966..85 1946..65 1926..45 baby boom 9 urbanfutures.com urbanfutures.com A 20 year age group Born in Canada: survivors in Canada ‐ 3,536,813 in 2014 1986..05 1966..85 1946..65 1926..45 baby boom 10 urbanfutures.com urbanfutures.com 5

A 20 year age group Born in Canada: survivors in Canada in 2014 1986..05 1966..85 1946..65 1926..45 baby boom 11 urbanfutures.com urbanfutures.com A 20 year age group 85,474 1% more 2006+ 1986..05 1966..85 1946..65 1926..45 Pre 1926 baby boom 12 urbanfutures.com urbanfutures.com 6

13 urbanfutures.com urbanfutures.com Two Dimension of Population Change: 1. Generation loss +13% +6% ‐ 48% ‐ 7% urbanfutures.com urbanfutures.com 7

Two Dimension of Population Change: 1. Generation loss 2. Population aging 35% 29% +10% 2% 0% Born 10 years earlier 1976..95 1956..75 1936..55 1916..35 1996+ 1986..05 1966..85 1946..65 1926..45 2006+ baby boom urbanfutures.com urbanfutures.com Aspects of housing market change: 1. older population aging in place Least likely 2014 2024 to move Most likely to move 16 urbanfutures.com urbanfutures.com 8

Aspect of housing market change: 2. younger pop forming households 2024 2014 Slight increase Dramatic increase 17 urbanfutures.com urbanfutures.com Net Demand: 1.9 million more occupied units have to be built as older population frees up only 1.4 million 1.4 million vacated + 179% +13% 3.3 million new households ‐ 5% ‐ 51% 2006+ 1986..05 1966..85 1946..65 1926..45 baby boom 18 urbanfutures.com urbanfutures.com 9

Net Demand: 1.9 million more occupied units 1.652 million more older households Already housed, aging in place 248,000 net additional households Born 10 3.3 million new households years earlier 1976..95 1956..75 1936..55 1916..35 1996+ 1986..05 1966..85 1946..65 1926..45 2006+ baby boom 19 urbanfutures.com urbanfutures.com 2024 2024 2014 20 2014 urbanfutures.com urbanfutures.com 10

21 urbanfutures.com urbanfutures.com Net : 1 million more 324,204 fewer in the older generations 1,318,708 more in the younger generations 2006+ 1986..05 1966..85 1946..65 1926..45 baby boom 22 urbanfutures.com urbanfutures.com 11

563,934 Net : More old folks 1 million more 430,570 More young folks 1986..05 1966..85 1946..65 1926..45 2006+ baby boom 23 urbanfutures.com urbanfutures.com Changing Currents: Social: Changing Life Cycles and Life Styles 24 urbanfutures.com urbanfutures.com 12

Life Cycle Patterns 25 urbanfutures.com urbanfutures.com Life Cycle Patterns 2014 2014 2024 2024 26 urbanfutures.com urbanfutures.com 13

Life Cycle Patterns Ground oriented rental 27 urbanfutures.com urbanfutures.com 28 urbanfutures.com urbanfutures.com 14

Ground Oriented Apartment 273,812 146,797 ‐ 1,233 +38,647 272,579 185,444 20% 22% 29 urbanfutures.com urbanfutures.com 30 urbanfutures.com urbanfutures.com 15

31 urbanfutures.com urbanfutures.com Changing Currents: Economic: Changing Economic Structure 32 urbanfutures.com urbanfutures.com 16

33 urbanfutures.com urbanfutures.com Services 98% $513 80% Durables $133B 153% cars, electronics, furniture $79B 131% Semi ‐ Durables $53B clothing, footwear $34B 44% $155B Non ‐ durables (food, fuel) $223B Note that accommodation is in services (housing services) not in durables. 34 urbanfutures.com urbanfutures.com 17

$Can/$US 35 urbanfutures.com urbanfutures.com 2866% 146% 161% 3706% 839% 36 urbanfutures.com urbanfutures.com 18

37 urbanfutures.com urbanfutures.com The west covers 55% of Ontario’s $26B International Trade Deficit 38 urbanfutures.com urbanfutures.com 19

The Context for Real Estate In Canada: 15 Dimensions of Change David Baxter – Urban Futures Background report and presentation at realestateforums.com/torontoref/en/program.php and urbanfutures.com 39 urbanfutures.com urbanfutures.com 20